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Simmons Reports Record Earnings for First Quarter 2018

PINE BLUFF, Ark., April 23, 2018 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ-GS:SFNC) today announced record net income of $51.3 million for the quarter ended March 31, 2018, compared to $22.1 million for the same period in 2017, an increase of $29.2 million, or 132.0%. Diluted earnings per share were $0.55, an increase of $0.20, or 57.1%, from the same period in 2017. Included in first quarter 2018 results was $1.3 million in net after-tax merger-related and branch right-sizing costs.

Excluding the impact of these items, core earnings were $52.6 million for the quarter ended March 31, 2018, compared to $22.5 million for the quarter ended March 31, 2017, an increase of $30.1 million, or 133.5%. Diluted earnings per share were $0.57, an increase of $0.21, or 58.3%, from the same period in 2017.

During the quarter, the Company completed its conversion of Southwest Bank with and into its subsidiary, Simmons Bank, as well as completed its offering of $330 million aggregate principal amount of 5.00% Fixed-to-Floating Rate Subordinated Notes due 2028 (the “Notes”). The Notes will bear a fixed interest rate of 5.00% per year in years 1-5, payable semi-annually in arrears, and a floating rate equal to three-month LIBOR plus 215 basis points in years 6-10, payable quarterly in arrears. The Notes were offered to the public at 100% of their face amount. The Company expects to use approximately $222 million of the net proceeds from the sale of the Notes to repay outstanding indebtedness and the remainder for general corporate purposes.

“We are off to a productive start for 2018,” said George A. Makris, Jr., chairman and CEO.

Makris continued, “The conversion of Southwest Bank is now complete and we look forward to continuing to serve our new customers in the Texas markets. We remain focused on the Bank SNB conversion and anticipate it will also be a smooth transition for our customers. We are excited about building a stronger and more diverse organization.”

The Company completed a 2-for-1 stock split effective February 8, 2018. Financial statements, including earnings per share as well as other share-related disclosures, have been adjusted to include the impact of the stock split on all periods presented.

At March 31, 2018, total deposits were $11.7 billion, an increase of 71.7%, compared to the same period in 2017 and a 5.1% increase from December 31, 2017. The increase is from the recent acquisitions and growth in core deposits. Total non-time deposits increased 70.6% compared to the same period in 2017, and comprised 81.1% of total deposits.

“We continue to focus on core deposits as a funding source for growth. We believe we have an opportunity to capitalize on the successes of the first quarter, especially in our new markets,” said Makris.

Net Interest Income

The Company’s net interest income for the first quarter of 2018 was $135.0 million, an increase of $62.6 million, or 86.5%, from the same period of 2017. Included in interest income was the yield accretion recognized on loans acquired of $11.3 million and $4.4 million for the first quarters of 2018 and 2017, respectively. Yield accretion was $2.7 million higher than projected due to accelerated cash flows of acquired loans. Based on our cash flow projections, we expect total accretion for 2018 to be in the range of $25 million to $28 million with more accretion income during the first part of the year and declining during the latter part of 2018.

Net interest margin was 4.17% for the quarter ended March 31, 2018, a 13 basis point increase from the same quarter of 2017. The Company’s core net interest margin, excluding the accretion, was 3.82% for the first quarter of 2018, a 2 basis point increase from March 31, 2017 and a 12 basis point increase from December 31, 2017. Cost of interest bearing deposits was 0.74% for the first quarter of 2018, a 41 basis point increase from March 31, 2017 and an 11 basis point increase from December 31, 2017.

Non-Interest Income

Non-interest income for the first quarter 2018 was $37.5 million, an increase of $7.5 million compared to the first quarter of 2017. The increase was primarily due to additional mortgage income, trust income, service charge and fee income resulting from the acquisitions.

Non-Interest Expense

Non-interest expense for the first quarter of 2018 was $98.1 million, an increase of $31.8 million compared to the first quarter of 2017. Included in this quarter were $1.3 million of net after-tax merger-related expenses and branch rightsizing costs. Excluding these expenses, core non-interest expense was $96.3 million.

The increases during the quarter were driven by incremental increases in operating expenses related to the additions of Bank SNB and Southwest Bank during the fourth quarter of 2017. The efficiency ratio for the first quarter 2018 was 53.24%.

Asset Quality

1st Qtr 2018

4th Qtr 2017

1st Qtr 2017

Allowance for loan losses to total loans

0.75%

0.73%

0.82%

Allowance for loan losses to non-performing loans

99%

90%

71%

Non-performing loans to total loans

0.76%

0.81%

1.15%

Net charge-off ratio (annualized)

0.24%

0.53%

0.18%

Net charge-off ratio excluding credit cards

0.20%

0.51%

0.11%

All loans acquired are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

At March 31, 2018, the allowance for loan losses for legacy loans was $47.2 million. The allowance for loan losses for loans acquired was $407,000 and the acquired loan discount credit mark was $79.1 million. The allowances for loan losses and credit marks provide a total of $126.7 million of coverage, which equates to a total coverage ratio of 1.1% of gross loans. The ratio of credit mark and related allowance to loans acquired was 1.7%.

Provision for loan losses for the first quarter of 2018 was $9.2 million, an increase of $4.8 million compared to March 31, 2017. The provision increase was due to increased loan migration during the quarter from the fourth quarter of 2017 acquisitions, which is consistent with our previous guidance.

Foreclosed Assets and Other Real Estate Owned

At March 31, 2018, foreclosed assets and other real estate owned were $29.1 million, an increase of $2.7 million, or 10.3%, compared to the same period in 2017 and a decrease of $3.0 million, or 9.3% from December 31, 2017. The composition of these assets is divided into three types:

1st Qtr 2018

4th Qtr 2017

1st Qtr 2017

Closed bank branches, branch sites & associate relocation

$8.1 million

$9.8 million

$5.8 million

Foreclosed assets - acquired

$14.9 million

$16.0 million

$15.1 million

Foreclosed assets - legacy

$6.1 million

$6.3 million

$5.5 million

Capital

1st Qtr 2018

4th Qtr 2017

1st Qtr 2017

Stockholders’ equity to total assets

13.5%

13.9%

13.6%

Tangible common equity to tangible assets

7.9%

8.1%

9.4%

Regulatory tier 1 leverage ratio

8.6%

9.2%

10.9%

Regulatory total risk-based capital ratio

13.8%

11.4%

14.4%

At March 31, 2018, common stockholders' equity was $2.1 billion, book value per share was $22.86 and tangible book value per share was $12.62. Asset growth due to the subordinated debt offering caused Tangible Common Equity to temporarily dip below 8%. With the anticipated pay off of approximately $104 million in parent company debt during the second and third quarters, along with earnings growth, this ratio will increase to a range of 8-9% which reflects a normal operating range for the Company.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company, headquartered in Pine Bluff, Arkansas, with total assets of $15.6 billion as of March 31, 2018 conducting financial operations throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock trades on the NASDAQ Global Select Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT on Tuesday, April 24, 2018. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 4198919. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant non-core activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.

Forward-Looking Statements

Statements in this news release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, changes in the assumptions used in making the forward-looking statements, and the Company’s ability to manage and successfully integrate its mergers and acquisitions could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corporation’s financial results is included in its Form 10-K filing with the Securities and Exchange Commission.

(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.

Page 7

Simmons First National Corporation

SFNC

Consolidated - Selected Financial Data

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2018

2017

2017

2017

2017

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

$

51,312

$

18,903

$

28,852

$

23,065

$

22,120

Diluted earnings per share

0.55

0.22

0.44

0.36

0.35

Return on average assets

1.38%

0.54%

1.25%

1.05%

1.07%

Return on average common equity

9.90%

3.88%

9.12%

7.65%

7.69%

Return on tangible common equity

18.77%

7.53%

14.47%

12.13%

12.22%

Net interest margin (FTE)

4.17%

4.21%

3.91%

4.04%

4.04%

FTE adjustment

1,130

1,925

1,751

2,082

1,965

Amortization of intangibles

2,837

2,839

1,724

1,553

1,550

Amortization of intangibles, net of taxes

2,096

1,725

1,048

944

942

Average diluted shares outstanding

92,638,765

87,036,044

64,847,592

64,051,560

63,225,800

Cash dividends declared per common share

0.15

0.13

0.13

0.13

0.13

Financial Highlights - Core (non-GAAP)

Core earnings (excludes non-core items) (1)

$

52,618

$

42,018

$

27,746

$

26,753

$

22,532

Diluted core earnings per share (1)

0.57

0.48

0.43

0.42

0.36

Core net interest margin (FTE) (2)

3.82%

3.70%

3.77%

3.79%

3.80%

Accretable yield on acquired loans

11,294

15,684

2,890

4,792

4,427

Efficiency ratio (1)

53.24%

51.36%

55.06%

56.04%

60.92%

Core return on average assets (1)

1.41%

1.20%

1.20%

1.22%

1.09%

Core return on average common equity (1)

10.15%

8.63%

8.77%

8.87%

7.83%

Core return on tangible common equity (1)

19.23%

15.97%

13.93%

13.99%

12.44%

YEAR-TO-DATE

Financial Highlights - GAAP

Net Income

$

51,312

$

92,940

$

74,037

$

45,185

$

22,120

Diluted earnings per share

0.55

1.33

1.16

0.71

0.35

Return on average assets

1.38%

0.92%

1.12%

1.06%

1.07%

Return on average common equity

9.90%

6.68%

8.18%

7.67%

7.69%

Return on tangible common equity

18.77%

11.26%

12.97%

12.17%

12.22%

Net interest margin (FTE)

4.17%

4.07%

3.99%

4.04%

4.04%

FTE adjustment

1,130

7,723

5,798

4,047

1,965

Amortization of intangibles

2,837

7,666

4,827

3,103

1,550

Amortization of intangibles, net of taxes

2,096

4,659

2,934

1,886

942

Average diluted shares outstanding

92,638,765

69,852,920

64,014,270

63,588,726

63,225,800

Cash dividends declared per common share

0.15

0.50

0.38

0.25

0.13

Financial Highlights - Core (non-GAAP)

Core earnings (excludes non-core items) (1)

$

52,618

$

119,049

$

77,031

$

49,285

$

22,532

Diluted core earnings per share (1)

0.57

1.70

1.20

0.78

0.36

Core net interest margin (FTE) (2)

3.82%

3.76%

3.79%

3.79%

3.80%

Accretable yield on acquired loans

11,294

27,793

12,109

9,219

4,427

Efficiency ratio (1)

53.24%

55.27%

57.25%

58.40%

60.92%

Core return on average assets (1)

1.41%

1.18%

1.17%

1.15%

1.09%

Core return on average common equity (1)

10.15%

8.56%

8.51%

8.37%

7.83%

Core return on tangible common equity (1)

19.23%

14.28%

13.48%

13.23%

12.44%

END OF PERIOD

Book value per share

$

22.86

$

22.65

$

19.51

$

19.16

$

18.65

Tangible book value per share

12.62

12.34

12.82

12.36

12.26

Shares outstanding

92,242,389

92,029,118

64,424,484

64,425,664

62,776,714

Full-time equivalent employees

2,626

2,640

1,942

1,919

1,876

Total number of financial centers

200

200

156

161

151

(1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.

(2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.

Page 8

Simmons First National Corporation

SFNC

Consolidated - Reconciliation of Core Earnings (non-GAAP)

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2018

2017

2017

2017

2017

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

$

51,312

$

18,903

$

28,852

$

23,065

$

22,120

Non-core items

Gain on sale of P&C insurance business

-

-

(3,708

)

-

-

Donation to Simmons Foundation

-

5,000

-

-

-

Merger-related costs

1,711

14,044

752

6,603

524

Branch right-sizing

57

116

435

(536

)

154

Tax effect (1)

(462

)

(7,516

)

1,415

(2,379

)

(266

)

Net non-core items (before SAB 118 adjustment)

1,306

11,644

(1,106

)

3,688

412

SAB 118 adjustment (2)

-

11,471

-

-

-

Core earnings (non-GAAP)

$

52,618

$

42,018

$

27,746

$

26,753

$

22,532

Diluted earnings per share

$

0.55

$

0.22

$

0.44

$

0.36

$

0.35

Non-core items

Gain on sale of P&C insurance business

-

-

(0.06

)

-

-

Donation to Simmons Foundation

-

0.06

-

-

-

Merger-related costs

0.02

0.17

0.01

0.11

0.01

Branch right-sizing

-

-

0.01

(0.01

)

-

Tax effect (1)

-

(0.10

)

0.03

(0.04

)

-

Net non-core items (before SAB 118 adjustment)

0.02

0.13

(0.01

)

0.06

0.01

SAB 118 adjustment (2)

-

0.13

-

-

-

Core earnings (non-GAAP)

$

0.57

$

0.48

$

0.43

$

0.42

$

0.36

YEAR-TO-DATE

Net Income

$

51,312

$

92,940

$

74,037

$

45,185

$

22,120

Non-core items

Gain from early retirement of trust preferred securities

-

-

-

-

-

Gain on sale of P&C insurance business

-

(3,708

)

(3,708

)

-

-

Donation to Simmons Foundation

-

5,000

-

-

-

Merger-related costs

1,711

21,923

7,879

7,127

524

Branch right-sizing

57

169

53

(382

)

154

Tax effect (1)

(462

)

(8,746

)

(1,230

)

(2,645

)

(266

)

Net non-core items (before SAB 118 adjustment)

1,306

14,638

2,994

4,100

412

SAB 118 adjustment (2)

-

11,471

-

-

-

Core earnings (non-GAAP)

$

52,618

$

119,049

$

77,031

$

49,285

$

22,532

Diluted earnings per share

$

0.55

$

1.33

$

1.16

$

0.71

$

0.35

Non-core items

Gain from early retirement of trust preferred securities

-

-

-

-

-

Gain on sale of P&C insurance business

-

(0.04

)

(0.06

)

-

-

Donation to Simmons Foundation

-

0.07

Merger-related costs

0.02

0.31

0.12

0.12

0.01

Branch right-sizing

-

-

-

(0.01

)

-

Tax effect (1)

-

(0.13

)

(0.02

)

(0.04

)

-

Net non-core items (before SAB 118 adjustment)

0.02

0.21

0.04

0.07

0.01

SAB 118 adjustment (2)

-

0.16

-

-

-

Core earnings (non-GAAP)

$

0.57

$

1.70

$

1.20

$

0.78

$

0.36

(1) Effective tax rate of 26.135% for 2018 and 39.225% for prior years, adjusted for non-deductible merger-related costs and deferred tax items on P&C insurance sale.

(2) Tax adjustment to revalue deferred tax assets and liabilities to account for the future impact of lower corporate tax rates resulting from the "Tax Cuts and Jobs Act," signed into law on December 22, 2017.

Page 9

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - End of Period

For the Quarters Ended

(Unaudited)

Mar 31

Dec 31

Sept 30

Jun 30

Mar 31

2018

2017

2017

2017

2017

($ in thousands, except per share data)

Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets

Total common stockholders' equity

$

2,109,051

$

2,084,564

$

1,257,199

$

1,234,076

$

1,170,889

Intangible assets:

Goodwill

(845,687

)

(842,651

)

(375,731

)

(379,437

)

(350,035

)

Other intangible assets

(99,504

)

(106,071

)

(55,501

)

(58,528

)

(51,408

)

Total intangibles

(945,191

)

(948,722

)

(431,232

)

(437,965

)

(401,443

)

Tangible common stockholders' equity

$

1,163,860

$

1,135,842

$

825,967

$

796,111

$

769,446

Total assets

$

15,597,309

$

15,055,806

$

9,535,370

$

9,068,308

$

8,626,638

Intangible assets:

Goodwill

(845,687

)

(842,651

)

(375,731

)

(379,437

)

(350,035

)

Other intangible assets

(99,504

)

(106,071

)

(55,501

)

(58,528

)

(51,408

)

Total intangibles

(945,191

)

(948,722

)

(431,232

)

(437,965

)

(401,443

)

Tangible assets

$

14,652,118

$

14,107,084

$

9,104,138

$

8,630,343

$

8,225,195

Ratio of equity to assets

13.52%

13.85%

13.18%

13.61%

13.57%

Ratio of tangible common equity to tangible assets

7.94%

8.05%

9.07%

9.22%

9.35%

Calculation of Discount for credit losses and allowance on loans acquired to total loans acquired plus

discount for credit losses and allowance on loans acquired

Credit discount on acquired loans

$

79,087

$

89,275

$

24,994

$

28,409

$

28,941

Allowance for loan losses on acquired loans

407

418

391

391

435

Total credit discount and ALLL on acquired loans

$

79,494

$

89,693

$

25,385

$

28,800

$

29,376

Total loans acquired

$

4,776,439

$

5,163,769

$

1,117,424

$

1,253,539

$

1,173,667

Discount and ALLL on acquired loans to acquired loans

1.66%

1.74%

2.27%

2.30%

2.50%

Calculation of Total Allowance and Credit Coverage

Allowance for loan losses

$

47,207

$

41,668

$

42,717

$

41,379

$

37,865

Total credit discount and ALLL on acquired loans

79,494

89,693

25,385

28,800

29,376

Total allowance and credit discount

$

126,701

$

131,361

$

68,102

$

70,179

$

67,241

Total loans

$

11,066,822

$

10,869,378

$

6,328,736

$

6,254,155

$

5,806,572

Total allowance and credit coverage

1.14%

1.21%

1.08%

1.12%

1.16%

Calculation of Tangible Book Value per Share

Total common stockholders' equity

$

2,109,051

$

2,084,564

$

1,257,199

$

1,234,076

$

1,170,889

Intangible assets:

Goodwill

(845,687

)

(842,651

)

(375,731

)

(379,437

)

(350,035

)

Other intangible assets

(99,504

)

(106,071

)

(55,501

)

(58,528

)

(51,408

)

Total intangibles

(945,191

)

(948,722

)

(431,232

)

(437,965

)

(401,443

)

Tangible common stockholders' equity

$

1,163,860

$

1,135,842

$

825,967

$

796,111

$

769,446

Shares of common stock outstanding

92,242,389

92,029,118

64,424,484

64,425,664

62,776,714

Book value per common share

$

22.86

$

22.65

$

19.51

$

19.16

$

18.65

Tangible book value per common share

$

12.62

$

12.34

$

12.82

$

12.36

$

12.26

Page 10

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date

For the Quarters Ended

(Unaudited)

Mar 31

Dec 31

Sept 30

Jun 30

Mar 31

2018

2017

2017

2017

2017

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

51,312

$

18,903

$

28,852

$

23,065

$

22,120

Net non-core items, net of taxes, adjustment

1,306

23,115

(1,106

)

3,688

412

Core earnings

$

52,618

$

42,018

$

27,746

$

26,753

$

22,532

Average total assets

$

15,088,210

$

13,897,778

$

9,175,607

$

8,812,460

$

8,414,470

Return on average assets

1.38%

0.54%

1.25%

1.05%

1.07%

Core return on average assets

1.41%

1.20%

1.20%

1.22%

1.09%

Calculation of Return on Tangible Common Equity

Net income

$

51,312

$

18,903

$

28,852

$

23,065

$

22,120

Amortization of intangibles, net of taxes

2,096

1,725

1,048

944

942

Total income available to common stockholders

$

53,408

$

20,628

$

29,900

$

24,009

$

23,062

Net non-core items, net of taxes

1,306

23,115

(1,106

)

3,688

412

Core earnings

52,618

42,018

27,746

26,753

22,532

Amortization of intangibles, net of taxes

2,096

1,725

1,048

944

942

Total core income available to common stockholders

$

54,714

$

43,743

$

28,794

$

27,697

$

23,474

Average common stockholders' equity

$

2,103,052

$

1,931,804

$

1,255,694

$

1,209,343

$

1,166,473

Average intangible assets:

Goodwill

(844,148

)

(731,661

)

(378,387

)

(362,925

)

(348,837

)

Other intangibles

(104,718

)

(113,770

)

(57,232

)

(52,419

)

(52,169

)

Total average intangibles

(948,866

)

(845,431

)

(435,619

)

(415,344

)

(401,006

)

Average tangible common stockholders' equity

$

1,154,186

$

1,086,373

$

820,075

$

793,999

$

765,467

Return on average common equity

9.90%

3.88%

9.12%

7.65%

7.69%

Return on tangible common equity

18.77%

7.53%

14.47%

12.13%

12.22%

Core return on average common equity

10.15%

8.63%

8.77%

8.87%

7.83%

Core return on tangible common equity

19.23%

15.97%

13.93%

13.99%

12.44%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

98,073

$

108,490

$

66,159

$

71,408

$

66,322

Non-core non-interest expense adjustment

(1,772

)

(19,160

)

(862

)

(6,700

)

(635

)

Other real estate and foreclosure expense adjustment

(1,020

)

(865

)

(1,071

)

(517

)

(550

)

Amortization of intangibles adjustment

(2,837

)

(2,839

)

(1,724

)

(1,553

)

(1,550

)

Efficiency ratio numerator

$

92,444

$

85,626

$

62,502

$

62,638

$

63,587

Net-interest income

$

134,966

$

126,919

$

78,819

$

76,812

$

72,380

Non-interest income

37,535

36,629

36,332

35,744

30,060

Non-core non-interest income adjustment

(4

)

-

(3,383

)

(632

)

43

Fully tax-equivalent adjustment

1,130

1,925

1,751

2,082

1,965

(Gain) loss on sale of securities

(6

)

1,243

(3

)

(2,236

)

(63

)

Efficiency ratio denominator

$

173,621

$

166,716

$

113,516

$

111,770

$

104,385

Efficiency ratio (1)

53.24%

51.36%

55.06%

56.04%

60.92%

Calculation of Core Net Interest Margin

Net interest income

$

134,966

$

126,919

$

78,819

$

76,812

$

72,380

Fully tax-equivalent adjustment

1,130

1,925

1,751

2,082

1,965

Fully tax-equivalent net interest income

136,096

128,844

80,570

78,894

74,345

Total accretable yield

(11,294

)

(15,684

)

(2,890

)

(4,792

)

(4,427

)

Core net interest income

$

124,802

$

113,160

$

77,680

$

74,102

$

69,918

Average earning assets

$

13,251,549

$

12,145,003

$

8,182,292

$

7,841,208

$

7,469,709

Net interest margin

4.17%

4.21%

3.91%

4.04%

4.04%

Core net interest margin

3.82%

3.70%

3.77%

3.79%

3.80%

Calculation of Core Loan Yield

Loan interest income

$

143,350

$

132,617

$

77,457

$

73,549

$

68,728

Total accretable yield

(11,294

)

(15,684

)

(2,890

)

(4,792

)

(4,427

)

Core loan interest income

$

132,056

$

116,933

$

74,567

$

68,757

$

64,301

Average loan balance

$

10,819,324

$

9,772,043

$

6,261,507

$

5,954,019

$

5,685,585

Core loan yield

4.95%

4.75%

4.72%

4.63%

4.59%

(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.

Page 11

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Year-to-Date

For the Quarters Ended

(Unaudited)

Mar 31

Dec 31

Sept 30

Jun 30

Mar 31

2018

2017

2017

2017

2017

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

51,312

$

92,940

$

74,037

$

45,185

$

22,120

Net non-core items, net of taxes, adjustment

1,306

26,109

2,994

4,100

412

Core earnings

$

52,618

$

119,049

$

77,031

$

49,285

$

22,532

Average total assets

$

15,088,210

$

10,074,951

$

8,800,675

$

8,613,240

$

8,414,470

Return on average assets

1.38%

0.92%

1.12%

1.06%

1.07%

Core return on average assets

1.41%

1.18%

1.17%

1.15%

1.09%

Calculation of Return on Tangible Common Equity

Net income

$

51,312

$

92,940

$

74,037

$

45,185

$

22,120

Amortization of intangibles, net of taxes

2,096

4,659

2,934

1,886

942

Total income available to common stockholders

$

53,408

$

97,599

$

76,971

$

47,071

$

23,062

Net non-core items, net of taxes

1,306

26,109

2,994

4,100

412

Core earnings

52,618

119,049

77,031

49,285

22,532

Amortization of intangibles, net of taxes

2,096

4,659

2,934

1,886

942

Total core income available to common stockholders

$

54,714

$

123,708

$

79,965

$

51,171

$

23,474

Average common stockholders' equity

$

2,103,052

$

1,390,815

$

1,210,487

$

1,187,906

$

1,166,473

Average intangible assets:

Goodwill

(844,148

)

(455,453

)

(363,383

)

(355,881

)

(348,837

)

Other intangibles

(104,718

)

(68,896

)

(53,941

)

(52,294

)

(52,169

)

Total average intangibles

(948,866

)

(524,349

)

(417,324

)

(408,175

)

(401,006

)

Average tangible common stockholders' equity

$

1,154,186

$

866,466

$

793,163

$

779,731

$

765,467

Return on average common equity

9.90%

6.68%

8.18%

7.67%

7.69%

Return on tangible common equity

18.77%

11.26%

12.97%

12.17%

12.22%

Core return on average common equity

10.15%

8.56%

8.51%

8.37%

7.83%

Core return on tangible common equity

19.23%

14.28%

13.48%

13.23%

12.44%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

98,073

$

312,379

$

203,889

$

137,730

$

66,322

Non-core non-interest expense adjustment

(1,772

)

(27,357

)

(8,197

)

(7,335

)

(635

)

Other real estate and foreclosure expense adjustment

(1,020

)

(3,042

)

(2,177

)

(1,067

)

(550

)

Amortization of intangibles adjustment

(2,837

)

(7,666

)

(4,827

)

(3,103

)

(1,550

)

Efficiency ratio numerator

$

92,444

$

274,314

$

188,688

$

126,225

$

63,587

Net-interest income

$

134,966

$

354,930

$

228,011

$

149,192

$

72,380

Non-interest income

37,535

138,765

102,136

65,804

30,060

Non-core non-interest income adjustment

(4

)

(3,972

)

(3,972

)

(589

)

43

Fully tax-equivalent adjustment

1,130

7,723

5,798

4,047

1,965

(Gain) loss on sale of securities

(6

)

(1,059

)

(2,302

)

(2,299

)

(63

)

Efficiency ratio denominator

$

173,621

$

496,387

$

329,671

$

216,155

$

104,385

Efficiency ratio (1)

53.24%

55.27%

57.25%

58.40%

60.92%

Calculation of Core Net Interest Margin

Net interest income

$

134,966

$

354,930

$

228,011

$

149,192

$

72,380

Fully tax-equivalent adjustment

1,130

7,723

5,798

4,047

1,965

Fully tax-equivalent net interest income

136,096

362,653

233,809

153,239

74,345

Total accretable yield

(11,294

)

(27,793

)

(12,109

)

(9,219

)

(4,427

)

Core net interest income

$

124,802

$

334,860

$

221,700

$

144,020

$

69,918

Average earning assets

$

13,251,549

$

8,908,418

$

7,829,548

$

7,653,177

$

7,469,709

Net interest margin

4.17%

4.07%

3.99%

4.04%

4.04%

Core net interest margin

3.82%

3.76%

3.79%

3.79%

3.80%

Calculation of Core Loan Yield

Loan interest income

$

143,350

$

352,351

$

219,734

$

142,277

$

68,728

Total accretable yield

(11,294

)

(27,793

)

(12,109

)

(9,219

)

(4,427

)

Core loan interest income

$

132,056

$

324,558

$

207,625

$

133,058

$

64,301

Average loan balance

$

10,819,324

$

6,918,293

$

5,967,036

$

5,819,803

$

5,685,585

Core loan yield

4.95%

4.69%

4.65%

4.61%

4.59%

(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.

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